NAB Morning Call Fed Cuts, RBA in May, or Maybe Not
Oct 29, 2025
Sally Auld, an expert NAB economist, dives into the recent Fed rate cut decision, highlighting internal divisions within the FOMC. She explains how a surprising spike in Australia's CPI could delay expected rate cuts from the RBA until May. The discussion also touches on the implications of halting quantitative tightening and previews upcoming decisions from the Bank of Japan and ECB. With insights into the broader economic landscape, Auld brings clarity to complex central bank dynamics.
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Divided Fed Causes Market Repricing
- The Fed's 25bp cut revealed deep division with members ranging from a 50bp preference to no move at all.
- That split explains why markets quickly repriced near-term rates and pushed yields and the dollar higher.
NVIDIA Hits $5 Trillion Milestone
- NVIDIA reached a $5 trillion market valuation, adding a trillion in four months and highlighting the AI race.
- That milestone underscores how AI leadership is driving huge market concentration among mega-cap tech firms.
Powell Signals Data-Dependent Path
- Powell signalled no foregone conclusion for December and emphasised data dependence, which nudged yields up.
- Markets that had priced further cuts are now reassessing timing and probabilities of additional easing.